Heated public hearings into FIC Bill

Carrim wraps up the public hearings and thanks all stakeholders for their representations. 

Yunis Carrim: White monopoly capital are the primary agents of illicit financial flows. It’s them who should feel victimised, not the Black Business Council. The target here is not black emerging capital. 

Yunus Carrim: When this issue arose Mr Momoniat said we need to finish quickly (with the bill) because there’s a FATF meeting in February. But we’re not going to do that. Mr Momoniat will need to go and explain at the FATF meeting (about the fact that the bill hasn’t been signed into law yet).    

Ismail Momoniat: We cannot scrap this bill. It would be irresponsible and take this country backwards. South Africa opted to go beyond Peps to Pips (politically influential people). 

Ismail Momoniat: Cabinet has long discussions about these things. Looking at the consequences for the country — this was discussed in great detail. I’m not sure it’s true to say we’re going beyond what FATF requires. We took too long to put some of these measures in place. By 2012 the world incorporated domestic Peps (politically exposed persons). In 2019 we’ll be asked about our compliance. Other countries are compliant with the foreign Peps — we’re not. Look at the US Parliament. People are outraged. A Finish delegation is also enraged. The concept of Peps is draconian, but all countries are expected to comply. I would invite whoever says we’re going beyond international standards to tell us how exactly. 

Ismail Momoniat: The standards that are there we are doing because it is in our interest. It has nothing to do with the fact that they are international standards. If there’s abuse — whether from banks or business — we will regulate everybody. The legislative tools we have enable us to do so. Once we’ve dealt with the president’s reservations we need to deal with this bill quickly. 

Ismail Momoniat: We joined FATF under former President Nelson Mandela. Already we are concerned that in our neighbouring countries the necessary standards are not in place. And it has a huge developmental impact. We need to take the developmental issues into account. I’d ask those who are calling for the bill to be scrapped to consider the poor people. This is like a credit rating. We don’t want to go there. The issue of abuse by banks — we agree that there are problems. We are coming with a tough regime to make banking safer for SA. Part of that is to treat customers fairly. Stripping the powers of inspection will make it difficult for us to regulate these things. 

Ismail Momoniat (Treasury): The legal situation is clear and there seems to be consensus. It would have been helpful if the BBC and PPF could have provided legal opinions. We hear their concerns though. It’s important that we understand the consequences (of the delay). There’s a lot of misunderstanding about the underlying thinking of the FATF recommendations. The standards are there, and we implement them on behalf of cabinet. But scrapping this bill would be a disaster for this country. When we go to the FATF meetings we go in a huge delegation and argue our case. Scrapping this bill will have serious consequences. What’s critical is that we’ve taken those standards because they are essential in fighting corruption. 

Corruption Watch: Why do we need this bill to be finalised so speedily? It’s important for us to have this legislation because it guides law enforcement agencies to understand who certain companies are. The FIC’s ability to identify certain actions and work with law enforcement agencies will be hampered if this bill is delayed. 

Cas Coovadia: I was told to stick with the issue (of the president’s reservation about the Bill’s constitutionality). We will participate fully in the process (public hearings that will take place on 14 March). 

Casac representative: Why the delay in signing the Bill. In his answering affidavit, the President set out the reasons for the delay. Essentially the process the president described was that the objections were considered by a legal team. The second set of objections were received in September. External legal opinions were received. We cannot speculate about the delay — that’s the explanation we received. Most importantly, there shouldn’t be any further delays. 

Baloyi: Mr Maynier, you haven’t seen the last of us. We have a term of office like you do. We’ve only been in office for three months. We will engage with you. We apologise if we’ve created the impression that we’ve leapfrogged into this process. 

Baloyi: The concerns we’re raising are legitimate. I wouldn’t say people’s accounts are being closed if it’s not true. We’re grateful for the fact that there’s  going to be a public hearing on transformation in the financial sector. I think it will be good for all of us — whether we’re pink, or green or yellow. 

Danisa Baloyi: We dealt with Section 45B(1C). We respect the rules you’re abiding by. The banks have constitutional standing. That’s our gripe. We want institutions of state to be responsible for regulatory framework. We are the people in this country and we should be listened to. We sit here today, but we are made to feel that we don’t belong here and that we’re aliens from outer space. But we are the country. If you believe we’re putting nonsense across — we carry the voices of people out there who don’t have access to Parliament. 

Baloyi: We as the BBC can never undermine the processes that deal with corruption. But we want to remove the fact that corruption has been given a black face. The only people who are corrupt in this country are (perceived as being) black. Those are the kinds of things we need to deal with. 

Danisa Baloyi: Why didn’t we respond during the Bill deliberation process? We weren’t in charge at the time. But we take collective responsibility for that mishap. I must say that not understanding how Parliament works — I do understand how business works. I find it disheartening to be told: ‘You need a workshop’. I’d never do this to this committee. The credit we should get is that we made the FIC Bill popular. We raised the profile of this Bill out there. Maybe that’s what Parliament should have done, considering the impact this bill would have on Parliament. 

Manyi: Why did the President attach our letters when he referred the Bill back to Parliament? I think he wanted to say the committee is making a mistake and take note of the BBC and the PPF’s objections. I think it must be clear that the issues the President raised are constitutional. What would make sense at this stage is to withdraw the Bill and send it back to Cabinet. 

Manyi: There was a particular individual who was suspended at SARS because of suspicious transactions. For us as a decolonised organisation — say we have similar “suspicious” transactions — this is how selective these things are. There’s no consistency. This is because these matters need to be dealt with by the law enforcement agencies. 

Manyi: I have not (consulted with the Guptas). 

David Maynier: I ask Mr Manyi, has he consulted the Guptas in this approach (with the FIC Bill)? 

Manyi: why are we sitting here considering a Bill that will plunge us into a crisis? The financial services is like cartel. Everybody talks to everybody. Our fear is that because of this things can be done to deal with you. 

Manyi: Crime fighting is the mandate of the police and intelligence agencies. The FIC is not in that list. It’s imposing itself on that list. That’s our fundamental problem. The FIC just decides, you, you and you are a politically exposed person. From where we see it as the BBC and the PPF — we’re unapologetically pro-ANC. When you fund the ANC, you are implicated. Your wife, your friends. By the mere fact that you are tainted by this thing you can’t move. We’ll be enslaved as a result of this legislation. FATF says there must be a due diligence process. 

Manyi: What do I mean when I say this (Bill) could plunge SA in a crisis? Let’s don’t elevate FATF to a higher status. It’s not a UN sanction body. Belonging to this organisation is voluntary we can withdraw tomorrow. But this organisation is actually a solid and sound one. They’ve asked all the member organisations to implement the regulations within their own constitutions and laws. What this Bill is about? Money laundering and terrorism. 

Manyi to MPs: I have decolonised. Jimmy is no longer used so please call me Mzwanele. 

Carrim: We’ll be back in the Constitutional Court if we don’t give attention to the problematic sections in this Bill. 

Manyi: Stop reducing an organisation’s view to that of a person. The PPF is a professional organisation with a people with stature. This proposal (about the FIC Bill) is a submission from the PPF — not from me as Manyi. When we make a contribution it is a well thought through one. 

Carrim: It seems, Mr Manyi that you’re saying whether this Bill gets approved with changes, or without a single change this bill is going to the Constitutional Court. 

Carrim: If you feel you disagree with what the lawyers said in this meeting you raise it and it will be dealt with on the 14th of March public hearings. The banks have certain rights — they’re the private sector. You can’t expect us as Parliament to do something about that. But I’m utterly convinced that we need to have a discussion about these matters in any case. 

Carrim, quoting from a travel writer who said a significant number of African American people in the south of US are still at the bottom end of the economy. There’s a racialised nature of the society we live in. I’m saying to the banking sector — there’s an impatience and restlessness and if you don’t deracialise it will be done for you.  

Carrim: I’d like to make some general points. We’ve got hearings on the financial sector as a whole and transformation in the sector. We in the financial sector regulation bill. Where a bank closes the account of a client it needs to give a reason. Cas (Coovadia), it’s very reasonable. You have to tell people when you’re closing their bank accounts, right? 

Makhosi Khoza: There’s a Russian poet who said: "In the absence of truth silence is a lie”. The EFF policy direction is devastating to the economy of this country. And they don’t understand the complexity of the international finance space. Be careful, South Africans. 

Pule Mabe (ANC): We as the ANC don’t need to be lectured on what we need to do in Parliament. There should never be signs of impatience with civil society when they raise issues. They ought to be listened to. They have a right. We understand what we’re expected to do. The people of SA will take pride in this Parliament. 

Carrim: If other issues are raised (such as those by the BBC) we need to separate them and hear them out on a public hearing in March, which will deal with transformation in the financial sector. 

Carrim: We said there are two hearings taking place. One that is bound by the rules and then a second hearing. We said on the Financial Sector Regulation Bill (FSRB) — we said we want a public hearing on the transformation of the entire financial sector. Today we’ll focus on what the rules say. Next time we’ll focus on all the other issues, such as those raised by the BBC. 

Floyd Shivambu: It looks like even members of Parliament — members of this committee who have been responsible for this Bill — it looks like the majority of this Bill act as it’s the first time they hear about the provisions in this Bill. Even if you raise legitimate concerns there are systems that we’ve agreed upon (as members of Parliament). 

Thandi Tobias (ANC): Can we have someone to explain thoroughly the administrative powers of (FIC) inspectors? 

There are people raising issues here because of politicking.

Pule Mabe (ANC): Where you come from determines what value I have. I come from Phlaborwa and the houses there don’t have the same value as a house in Sandton. So how do we take a process of this forward without excluding other views? 

FICA bill will even impact how SA looks when it goes to banks to borrow money.

We should put forward laws that accommodate everyone - not just one political party.

Pule Mabe (ANC): When someone from BBC says their accounts are being closed, it requires special attention. It’s important that we listen to everyone. Parliament has processes and there’s a process that gives the possibility to renew laws. If there are things that require a review stakeholders come back and we listen. We want to put forward laws that accommodate everyone whether we’re ANC, EFF, or DA. 

If someone says their bank accounts have been closed, it is an important matter to investigate.

Pule Mabe (ANC): Only a progressive government opens up to stakeholders. The ANC that I represent is driving a rigorous transformation programme. All institutions need to operate in a fair manner. Why do we want to create an environment where banks act as players and referees and decide who is bankable and who not. 

Makhosi Khoza: To the PPF, what is your recommendation? What should we do as Parliament? The rules are very clear. We cannot give attention to any other thing in the legislation. You go to the highest authority. Yet you have a very legitimate story. How do we work around this? The reality is — we’re Parliamentarians. So tell us, how are we going to intervene? The majority of black people can be classified as so-called PEPs — politically exposed persons. 

Committee member: Ultimately we are parliamentarians and have a set of rules to follow. We have to find corruption.

Makhosi Khoza: Casac said in their letters and responding affidavit the President attached the PPF and BBC objections. What I want to know from you now, what is the legal status of those letters? 

Makhosi Khoza: I ask BBC and PPF, why didn’t you participate in the process of parliament so that we could have heard your objections at an appropriate time? Don’t you think you are compromising the president by going straight to him? Right now you’ve heard there’s very little what we can do. We shouldn’t be sharing collective stupidity. We really have to start understanding there are parameters in which we need to operate. You are making valuable contributions, but they are coming to us so late.